To provide for the deductibility of certain mortgage interest and real property taxes by Federal employees receiving overseas housing allowances.

Provides that a payment or allowance shall be treated as a military housing allowance under the Internal Revenue Code for purposes of the deductibility of mortgage interest and real property taxes, if such payment was provided: (1) to a Federal employee stationed outside the continental United States; and (2) for expenses similar to the expenses for which any military housing allowance is provided.